What’s the VA loan?
A VA loan is a loan program offered by the Department of Veterans Affairs (VA) to help service members, veterans, and eligible surviving spouses buy homes. The VA does not…
What’s USDA Loan?
The Rural Housing Service, part of the U.S. Department of Agriculture (USDA) offers mortgage programs with no down payment and generally favorable interest rates to rural homebuyers who meet the…
What’s the subprime mortgage or Non-QM mortgage?
When lenders use the term, they generally mean a loan program for borrowers who do not qualify for a prime loan, often with a higher interest rate.
What’s the right of rescission?
The right of rescission refers to the right of a consumer to cancel certain types of loans. If you are buying a home with a mortgage, you do not have…
What’s the Reverse mortgage?
A reverse mortgage allows homeowners age 62 or older to borrow against their home equity. It is called a “reverse” mortgage because, instead of making payments to the lender, you…
What’s the PITI?
Principal, Interest, Taxes, and Insurance, known as PITI, are the four basic elements of a monthly mortgage payment.
What’s the Origination Fee?
An origination fee is what the lender charges the borrower for making the mortgage loan. The origination fee may include processing the application, underwriting and funding the loan, and other…
What’s Mortgage Insurance?
Mortgage insurance protects the lender if you fall behind on your payments. Mortgage insurance is typically required if your down payment is less than 20 percent of the property value.…
What’s the Margin?
The margin is the number of percentage points added to the index by the mortgage lender to set your interest rate on an adjustable-rate mortgage (ARM) after the initial rate…
What’s the loan-to-value (LTV) ratio?
The loan-to-value (LTV) ratio is a measure comparing the amount of your mortgage with the appraised value of the property. The higher your down payment, the lower your LTV ratio.…
What’s the lender’s title insurance?
Lender’s title insurance protects your lender against problems with the title to your property-such as someone with a legal claim against the home. Lender’s title insurance only protects the lender…
What’s an Interest-only loan?
An interest-only mortgage is a loan with scheduled payments that require you to pay only the interest for a specified amount of time.
What’s Initial adjustment cap?
An initial adjustment cap is typically associated with adjustable-rate mortgages (ARMs). This cap determines how much the interest rate can increase the first time it adjusts after the fixed-rate period…
Home inspection
A home inspection is often part of the home buying process. You typically have the right to hire a home inspector to examine the property and point out its strengths…
Home equity line of credit (HELOC)
A home equity line of credit (HELOC) is a line of credit that allows you to borrow against your home equity. Equity is the amount your property is currently worth,…
What’s Foreclosure?
Foreclosure is when the lender or servicer takes back property after the homeowner fails to make mortgage payments. In some states, the lender has to go to court to foreclose…
First-time home buyers (FTHB) loan programs
First-time home buyers (FTHB) may use a number of different types of loan programs to purchase their first home. Popular FTHB loans include programs offered by FHA, VA, USDA, Fannie…
What’s FHA loan?
FHA loans are loans from private lenders that are regulated and insured by the Federal Housing Administration (FHA). FHA loans differ from conventional loans because they allow for lower credit…
What’s Fannie Mae?
The Federal National Mortgage Association (Fannie Mae) purchases and guarantees mortgages from lending institutions in an effort to increase affordable lending. Fannie Mae is not a federal agency. It is…
What Is the Prime Rate?
The prime rate is the interest rate that commercial banks charge their most creditworthy corporate customers. The federal funds overnight rate serves as the basis for the prime rate, and…
Initial Interest Rate Cap
An initial interest rate cap is defined as the maximum amount that the interest rate on an adjustable-rate loan can adjust at the first scheduled rate adjustment. Interest rate caps…
Home Appraisal
An appraisal is a professional opinion of your home’s value and is an important step in the home-buying process. Appraisals are conducted by licensed or certified professionals, who provide opinions…
Fixed-rate Mortgage
The term “fixed-rate mortgage” refers to a home loan that has a fixed interest rate for the entire term of the loan. This means that the mortgage carries a constant…
FHA Limits 2022
For 2022, the FHA floor was set at $420,680 for single-family home loans. This minimum lending amount covers most U.S. counties. The FHA ceiling represents the maximum loan amount. For…
FHA Loans
An FHA-insured loan is a US Federal Housing Administration mortgage insurance-backed mortgage loan that is provided by an FHA-approved lender. FHA mortgage insurance protects lenders against losses. An FHA loan…